[Caihua Social News] Digital Kingdom (00547-HK) announced that on December 11, 2020, the company entered into a subscription agreement with the subscriber HLEE Finance S.princip.r.l. Under the subscription Agreement, the Company placed 6814760000 shares to HLEE Finance S.subscription .r.l at a subscription price of HK $0.050 per subscription share. The shares account for approximately 16.67% of the enlarged issued share capital of the Company. The subscription price is about 12.28% off last Friday's closing price of HK $0.057 per share.

The total and net proceeds will be approximately HK $340738000 and HK $340538000 respectively and are proposed to be used for the establishment of joint ventures, the media and entertainment divisions of the Group and for general working capital.

In addition, in accordance with the joint venture formation agreement, the company and HLEE Finance S.princip.r.l agreed to establish and jointly invest in the joint venture. It is currently proposed to register and establish a joint venture in Luxembourg and the joint venture and ╱ or its subsidiaries will engage in (I) developing or investing in media and entertainment business based in Europe and North America and making use of the group's virtual human and other technologies on terms acceptable to the company; and (ii) such other business as may from time to time be approved by the joint venture shareholders holding not less than 70 per cent of the total number of shares issued at that time.

Digital Kingdom subsidiaries and HLEE Finance S.princip.r.l subsidiaries will hold 60 per cent and 40 per cent interests in the joint venture respectively in consideration of the subscription price of approximately HK $187800000 (equivalent to 20000000 euros) and approximately HK $125200000 (equivalent to 13333333 euros) paid in cash. Upon completion of these subscriptions, the joint venture will become an indirect non-wholly owned subsidiary of the Company.

HLEE Finance S.progres.r.l is mainly engaged in investing in the global media industry. Its ultimate beneficial owner is Mr. Clive Ng Cheang Neng, a veteran media entrepreneur and investor.